business news in context, analysis with attitude

Published on: January 20, 2020

by Kevin Coupe

On Saturday morning, Frieda Rapoport Caplan passed away. She was 96, and leaves behind not just a family company that continues to push the boundaries in terms of new and unfamiliar produce items imported into the US, but also a life in which she pushed boundaries in terms of what was appropriate and acceptable.

I feel the loss enormously. Frieda was my friend.

In 1962, Frieda launched Frieda's Produce Specialties in Los Angeles. It was the first wholesale produce company owned and operated by a woman.

The Los Angeles Times, in its obit, describes her as "the woman who broke the glass ceiling in the testosterone-doused produce world and forever changed the way Americans eat fruits and vegetables … a tenacious maven credited for introducing kiwis, mangoes, habanero and shishito peppers, passion fruit, bean and alfalfa sprouts, baby carrots, sugar snap peas, starfruit, blood oranges, shiitake mushrooms, turmeric, and hundreds more fruits and vegetables into the supermarket mainstream. Into the bellies of American consumers."

Frieda, the Times writes, "was loquacious, driven and loved to take risks … In heels and a skirt, she revolutionized the way the produce world did business, adding recipes and cooking instructions on packages of exotic produce to tame the distrust of an unsuspecting public."

CBS Sunday Morning produced a piece about Frieda that was supposed to run last fall, but was held until they had more time to devote to the piece; now an appreciation of a wonderful life, the piece ran yesterday, and you can watch it here.

I'm not exactly sure how we became friends. I think we saw each other at the occasional industry event, and suddenly I was getting emails from this wonderfully opinionated woman in her late eighties and early nineties, relentlessly curious, making suggestions about things to read, people to get to know, offering critiques about this story or that commentary, and even telling me when she didn't like the picture I was using, and expressing approval when I changed it.

I last saw Frieda on November 16. I knew she'd been laid up by a broken leg and subsequent complications, and so I stopped by her house in Southern California to say hi. It wasn't just a quick visit with an ailing friend. She asked me questions about MNB stories she'd read, told me about books she'd been reading, and was thoroughly engaging - I think I was there for a couple of hours.

When I heard that Frieda has passed away, it hit me like a freight train … I know she was 96, but I fully expected that she’d be around for many more years. She had such a wonderfully indomitable spirit, infectious enthusiasm for life, and mischievous sense of humor - she was the kind of old person that I would like to be, which is to say not really old at all. Sometimes the parts wear out, but the heart and soul continue on. In Freida’s case, they will be sustained by the business she created and that her family - Karen and Jackie and Alex - shepherd and grow. But they also will find life in those of us lucky enough to know her.

She opened our eyes to what is possible. I'll always treasure her friendship.

Published on: January 20, 2020

David Glass, who replaced founder Sam Walton as CEO of Walmart in 1988 and shepherded the company through a time of growth and expansion into the grocery business, has passed away. He was 84, and had been suffering from pneumonia.

The Wall Street Journal writes that "during his 12 years as CEO, annual sales soared to $165 billion from $16 billion as Walmart built supercenters, combining groceries with general merchandise, and expanded international operations and the Sam’s Club chain.

"When Mr. Glass became CEO, Walmart was the third-largest U.S. retailer after Sears, Roebuck & Co. and Kmart Corp. Within a few years it surged past both."

Glass joined Walmart as CFO in 1976, personally recruited by Walton. After succeeding him, Glass "stayed out of the spotlight and for years worked at a desk said to have been bought for $75 at a garage sale. When he had visitors at the office, he was known for fetching their coffee down the hall at a vending machine rather than asking an underling to serve beverages."

After retirement, Glass satisfied a longtime passion for baseball by buying the Kansas City Royals for $96 million in 2000. In 2015, the Royals won the World Series. Glass sold the team last year for $1 billion.

Published on: January 20, 2020

The New York Times reports on the Aventura Mall, described as a shopping complex between Miami and Fort Lauderdale that "is using a nine-story slide … to give shoppers an experience they can’t get online."

The slide may be the most dramatic example of how the mall is differentiating itself, but it is not the only one. Sure, it has department store anchors (Nordstrom , Bloomingdale's) as well as the usual complement of smaller retailers and businesses that started online and now are expanding with physical locations (Warby Parker, Casper Mattress).

It also continues to expand, and improve its food offerings. The food court now is called Treats Food Hall, and sells "lobster rolls, Cuban food and pizza. Nearby is a ceviche restaurant, a barbecue joint, and Tap 42 Craft Kitchen and Bar, which, in an un-mall-like arrangement, has outdoor seating and serves drinks past midnight. Two hair salons, two nail salons and a Tesla dealership are also in the mix."

There's also considerable art, and an event space that can be used for weddings and other parties.

"In emphasizing low-tech entertainment over cutting-edge gadgetry," the Timeswrites, "Aventura is betting that brick-and-mortar retailers can beat online vendors without having to play their game … And as unlikely as it is for a 37-year-old property filled with chain stores to be at the forefront of anything, Aventura may have stumbled on a winning formula. With nearly a 100 percent occupancy rate … the mall is widely considered one of the most successful in the country, which may be particularly notable as store closings mount."

Published on: January 20, 2020

Fast Company reports that Ikea, the Swedish furniture retailer that made its reputation with enormous stores with football field-sized parking lots - Tina Fey once joked that Idea is "where marriages go to die" - is testing a new format in a Vienna location that has zero parking spaces.

The store, in a new seven-store building, is part of the company's effort "to shrink its carbon footprint, including the pollution from customers driving to suburban stores … The location is next to a tram stop and a three-minute walk from a subway station; like other parts of the city, it’s easily accessible by bike. Anything that customers can’t easily carry away will be delivered from a new logistics center farther away (and soon, as with other Ikea stores, those deliveries will happen via electric delivery vans)."

The story says that two of the building's floors will be used as a hostel, and the roof will be used as a public park. And, the architects tell Fast Company, "the design is sustainable in another way: Unlike a standard big-box store, the design is aesthetically interesting enough that people should want to keep it around in the future rather than tearing it down."

Published on: January 20, 2020

Delish reports that Unilever-owned Ben & Jerry's has informed a federal judge that it will no longer claim that its ice cream is all made from "happy cows," as it deals with litigation charging that it was being misleading in its marketing.

Or as MNB put it back when first reporting the lawsuit, "udder disingenuousness."

Ben & Jerry's "Caring Dairy" program, which is said to create happy cows that presumably produce higher quality milk, are said to embrace high environmental and animal welfare standards. But the the Organic Consumers Association (OCA) has challenged that assertion, suggesting that many of the cows used to make Ben & Jerry's ice cream were not living in ways that met those standards.

Apparently the OCA was right. Delish notes that Ben & Jerry's also "said it had wiped the faces of the cows on its packaging, leaving them with 'no discernible expression'."

"The removal of misleading 'happy cow' claims is a victory for consumers and an indication that Ben & Jerry's can't back up those claims," said OCA International Director Ronnie Cummins in a press release. "But this is just one small step toward more honest representation of the Ben & Jerry's brand."

Published on: January 20, 2020

The Wall Street Journal reports that Best Buy CEO Corie Barry is being investigated by the board of directors following charges that she "had an inappropriate romantic relationship with a fellow executive, who has since left the electronics retailer."

According to the story, the charges were made via an anonymous letter saying that "Ms. Barry had a romantic relationship for years with former Best Buy Senior Vice President Karl Sanft before she took over as CEO last June … Mr. Sanft, former senior vice president of retail operations, had no comment for this article. He left Best Buy in early 2019 and is now the chief operating officer of 24 Hour Fitness Worldwide Inc."

Barry also did not comment about the charges, except to say she was cooperating with the investigation. The Journal notes that "she succeeded Hubert Joly, who led a turnaround at the retailer and still serves as its executive chairman. Mr. Joly’s predecessor as CEO resigned abruptly in April 2012 after the board opened an investigation into his personal conduct. The company was exploring whether he misused company assets in the course of an alleged relationship with a female subordinate."

Published on: January 20, 2020

• CNBC reports that "Walmart is shuffling its executive team after the 2019 holiday season." Withe the departure of chief merchant Steve Bratspies, Walmart U.S. CEO John Furner sent out an internal memo saying that he will be replaced by Scott McCall who most recently led entertainment, toys and seasonal at Walmart.

The company also announced that Dacona Smith has been named as chief operating officer of Walmart U.S.; he previously was COO at Sam’s Club.

Replacing Smith as COO at Sam’s Club is Lance de la Rosa, who has held several leadership roles there, including senior vice president of the East division, senior vice president of operations transformation and senior vice president of merchandise execution.

Published on: January 20, 2020

• Amazon announced last week that it is opening a new pop-up store in one of its Seattle headquarters buildings - it is described as an expansion of existing retail initiatives, but the company isn't saying much more than that, other than to say it will have a revolving inventory.

While Amazon has been investing in bricks-and-mortar formats, less than a year ago it said it would shutter 87 pop-up stores around the country that primarily sold Amazon-branded electronics.

Published on: January 20, 2020

• The Cincinnati Business Courier reports that Kroger "and Northern Kentucky University are collaborating to open a digital innovation lab at NKU …the story says that "Kroger is involved in other digital initiatives involving higher education in Cincinnati. Its digital and technology prowess encompasses its 84.51 data analytics subsidiary downtown and its digital and technology efforts covering a broad swath of its supermarket business."


• USA Today reports that J.C. Penney plans to close another six stores and a call center, following last year's decision to close 27 stores and end the sale of appliances and furniture.

The stores will be closed effective April 27.

Published on: January 20, 2020

We had a story the other day about how CVS is increasing its commitment to its HealthHUB concept, which led me to comment:

This goes back to something that I've long said here - that the successful retailers will be more than just a source of product, but will develop a reputation for being a resource for the shopper. That's what CVS is doing here, which makes competitive sense at a time when both Walmart and Amazon are building up their street cred in the healthcare/self care segment.

Prompting MNB reader Jerome Schindler to respond:

Based on my personal experiences, that mirror a lot of consumer comments on social media, CVS is doing a very poor job of responding to their shoppers' comments, concerns or complaints.  Their company customer services dept. won't even respond to my emails.  Phone conversations with them are equally less than satisfactory.   Management needs to read the book "A complaint is a gift".   (I have the same issues with Kroger - maybe it is me.)

I formerly was a very good patron of CVS but no longer shop very often there.



From MNB reader Brian Blank:

Interesting item on Walmart’s growing use of in-store robots.  I haven’t spent a ton of time in Walmart stores recently - although I made a couple trips in to the Supercenter in my rural Ohio hometown during our Thanksgiving and Christmas visits, and picked up an online order at my local store as well - but I haven’t encountered their robots so far. I’m actually hoping to do so at some point so I can compare their execution to the Stop & Shop robots.

We have friends who have declared the S&S robots to be “creepy as [very bad word]” - I don’t find them creepy, just annoying, as they seem to have a propensity from blocking my access to the aisles I need to shop.  Also, they seem to just utilize the robots to monitor for spills (and apparently, a dropped shopping list or store flyer counts as a “spill”).  I hope Walmart’s ‘bots are successful in their mission of identifying (and fixing) out-of-stocks on the store shelves.

One thing to watch out for, if anyone in Bentonville is reading this, is that humans may undermine these efforts, even if unintentionally - something that seems to happen at ALL grocers and mass retailers.  There seems to be a tendency for certain SKUs to be perpetually out-of-stock, and I believe it can be traced to the misguided notion that there shouldn’t be holes on the shelves.  Well, the notion is valid and well-guided, but the reality is that inevitably, empty spots are filled in with adjacent product to disguise the OOS situation, which means careless humans do not restock or reorder items that are out, and would also mean that a robot would also not “see” a hole that has been camouflaged by fill-ins.




Regarding Amazon's ecosystem approach, one MNB reader wrote:

Amazon seems to have found a new way to sell books by making successful Prime TV shows using characters from popular authors - examples include Tom Clancy's Jack Ryan series, Michael Connelly's Harry Bosch books, and coming soon a new series with Lee Child's iconic Jack Reacher. These are natural tie-ins for Amazon with its roots as a bookseller. After watching the Jack Ryan episodes I've begun reading the old Tom Clancy books on my Amazon Kindle. While written in the 1980's and 90's his stories involving military and government agencies continue to be relevant and compelling (and I don't have to lug around 1,000 page 'doorstops').




We've had some stories about the Amazon-Kohl's relationship, which led MNB reader Pam Samaniego to write:

When I heard that Kohl’s was going to take Amazon returns, I questioned whether that would be a good idea for Kohl’s.

Just this weekend, I was prodded into using that in-store return service by my young adult son. Evidently he felt it was easier than finding a shipping box, printing a label, and mailing it back, and I was willing to give it a try, so off we went to Kohl’s. 

By design, Kohl’s had the Amazon return desk deep in the store, but the return process was very quick and very easy. The unexpected bonus was receiving 25% off Kohl’s coupons with our return confirmations.

Turns out, we spent most of our Amazon return money on in-store purchases that day, so I’d say that scenario worked out just fine for Kohl’s.

From another reader:

In regards to the Kohl’s - Amazon partnership: I do believe it’s working - personally returned 3-5 items to my local store. As well as even looked to take advantage of the 20% off coupon that I received each time I made the return.

The issue is KOHL’s: (1) the coupon is not valid on all items (Nike, Adidas, Under Armour, etc..). This is the same compliant you hear from customers in regards to Macys!

And (2) the stores are a MESS - everything is on sale or on clearance, product never on correct racks - looks like Marshalls met Macys and had a KOHLs

Mgmt. (as you always mention) needs to walk some store (think Target mgmt. previously did when reviewing what needed to change) and realize what makes them different - providing a reason for their customers to shop!

I took an Amazon return to Kohl's this weekend, and also found the return desk to be way in the back of the store, sharing space with the customer service desk. When I got there, there was only one person in front of me, and so things went quickly … but by the time I was done, five minutes later, there were maybe eight people on line. Timing was everything, and if'd gotten there a few minutes later, I would've been frustrated.




MNB last week took note of a Reuters report that Amazon founder/CEO Jeff Bezos has committed $1 billion to help small businesses in India online, "reaching out to some of his fiercest critics in a goodwill visit that saw him donning traditional Indian attire and fly a kite with children … Amazon said it will setup digital centers in 100 Indian cities and villages to help businesses get online to sell their goods and will offer support in marketing and logistics."

One MNB reader responded:

I read this and literally had to re-read it.  I work for a major corporation, and our IT and bill payment functions are out-sourced to India, which eliminated hundreds of jobs for long-time employees here.  I also own a small business on the side, and I am fully aware of the struggles small businesses face here to get their product in front of people and make sales.  I am just appalled that those funds couldn’t have stayed here.  Many people selling on Amazon are mothers that can’t work “normal” business hours, veterans, or a myriad of other examples of people really trying to provide, but willing to make an effort instead of taking government assistance.  This could be a very long comment, but let’s just say this totally disgusted me.




Finally … last week we had a story about Vessel, which can best be described as a program encouraging coffee shops to offer reusable mugs instead of disposable cups; when people are done with them, they can drop them off at any of the other participating locations, where it will be collected, washed, and returned.

The story noted that new laws and rules governing the use of single use items - from bags to straws, plates to cups - are creating business opportunities for companies like Vessel, which isn't making money yet but is ahead of projections when it comes to adoption by cafes.

I commented, in part:

I have to be honest here. I'm not sure that I'd want to use one of these cafes' reusable cups, simply because I'm not entirely confident about the whole washing thing. But … and maybe this is part of the point … these policies would probably encourage me to bring my own mug to the coffee shop.

I don't do it now. I don't even think about it. But part of what these changing laws and resultant policy changes do is impact how we all think about things. We consider stuff that we never considered before. We develop habits that we never had before. And the result can be less crap out there that fouls a planet that seems increasingly fragile.

Lots of MNB folks challenged part of that comment.

From MNB reader Suzanne Riel:

If you are concerned about the cleaning process – how is that any different than getting served a beer in a glass or using silverware at a restaurant?
 
From MNB reader Gregory Gheen:

I assume that when you go out to eat you don't always eat at fast food? So if you are partaking in nicer restaurants (cafe's), aren't you using their cups, glasses, plates, silverware which is basically the same as this story?

From another MNB reader:

Seriously Kevin? If you have concerns about the cleanliness of the Vessel mugs you should give up dining out. No difference IMO from a restaurant dishwasher cleaning everything you eat & drink with. I hope that Vessel is the long overdue death knell for styrofoam cups.

From MNB reader Dan Jones:

I am betting you eat at restaurants with ceramic plates and permanent cutlery.  You do not bring your own, do you?  Why would this be any different?

MNB reader David Armstrong wrote:

You are  probably too  young but, think milk bottles!

I am not too young to remember.

From MNB reader Jeff Weidauer:

Interesting that you’re uncomfortable reusing a coffee cup because of the washing thing. Do you bring your own dishes when you eat at a restaurant as well?

And from MNB reader Bill Ziegler:

You’re "not entirely confident about the whole washing thing?” Do you bring your own plates to restaurants? What about drinking glasses in hotel rooms?

I suspect you haven’t thought this through. It seems like a real opportunity to enable positive change and worthy of support.

Okay. I get the point.

Published on: January 20, 2020

In the National Football League Conference Championships…

Tennessee Titans 24
Kansas City Chiefs 35

Green Bay Packers 20
San Francisco 49ers 37

The Chiefs and the 49ers will meet in Super Bowl LIV on Sunday, February 2.

Published on: January 20, 2020

Fast Company reports that Ikea, the Swedish furniture retailer that made its reputation with enormous stores with football field-sized parking lots - Tina Fey once joked that Idea is "where marriages go to die" - is testing a new format in a Vienna location that has zero parking spaces.

The store, in a new seven-store building, is part of the company's effort "to shrink its carbon footprint, including the pollution from customers driving to suburban stores … The location is next to a tram stop and a three-minute walk from a subway station; like other parts of the city, it’s easily accessible by bike. Anything that customers can’t easily carry away will be delivered from a new logistics center farther away (and soon, as with other Ikea stores, those deliveries will happen via electric delivery vans)."

The story says that two of the building's floors will be used as a hostel, and the roof will be used as a public park. And, the architects tell Fast Company, "the design is sustainable in another way: Unlike a standard big-box store, the design is aesthetically interesting enough that people should want to keep it around in the future rather than tearing it down."

Published on: January 20, 2020

Digital strategies aren't just about creating alternatives to the bricks-and-mortar shopping experience. Done effectively, they can actually bring people back to the store, while also eliminating customer anonymity, creating rich and actionable data, and deepen relationships between the store and consumer in a way that transcends the simple transaction.

Our newest Retail Tomorrow podcast, which brings together a terrific panel of experts from a wide range of disciplines, was recorded at Google’s New York City offices during the recent National Retail Federation (NRF) Show. Our guests:

• Matt Alexander, co-founder of Neighborhood Goods, an unusual and fascinating take on physical retailing with stores in Dallas and New York.

• Patrick Flanagan, senior vice president of digital marketing and strategy for Simon, which has more than 200 properties in 37 states and Puerto Rico.

• Tom Furphy, CEO and Managing Director of Consumer Equity Partners, a member of the Retail Tomorrow podcast family and a regular contributor to "The Innovation Conversation" on MNB.

• And Jalna Silverstein, a leader in Ernst & Young’s Transaction Advisory Practice and its Real Estate, Consumer Experience and Retail Strategy.

This Retail Tomorrow podcast is sponsored by the Global Market Development Center (GMDC).

Pictured below are our panel members, from left: The Content Guy, Matt Alexander, Tom Furphy, Patrick Flanagan, Jalna Silverstein.

Enjoy!